Organisation for Economic Cooperation and Development

OECD members include most European countries, the US, Australia, New Zealand, Mexico, Czech Republic, Hungary, Poland, Japan, Slovak Republic, Turkey and Korea. Most Far East, Middle East, African and South American countries are not members but are being asked by the OECD to join with it in its exchange of information initiatives.

In May 1996 the OECD called for its members to ‘develop measures to counter the distorting effect of harmful tax competition’. Since then, OFCs have been under increasing pressure to introduce transparency and exchange of information procedures so that OECD member states can obtain the information they need to tax their citizens and residents correctly. The OECD has threatened OFCs not cooperating with these initiatives with punitive sanctions so most OFCs have made a commitment to the OECD to introduce the requested measures. OFCs that fail to make this commitment are labelled as ‘un-cooperative tax havens’ and will face sanctions from all OECD countries which will effectively put them out of business.